Growth or no growth?

By Jason Moore RIGHT, according to the Balearic government, we've enjoyed a record holiday season, tourists have spent a record amount of money and everything is rosy in the Balearics. Well, I don't want to spoil the party, but why is it that the local economy has only grown by a meagre 1.6 percent? Even though everything is fine, our rate of growth is still the lowest in Spain, far below the rest of Europe and light years away from the British rate of growth. So who do you believe? The economists or the politicians? It's a difficult one. However, if you walk around Palma you will notice that there has been a sudden increase in the number of shop closing-down sales and unfortunately there are plenty of For Sale signs on businesses which have now ceased trading. In addition, restaurants complain of a drop in takings, and sales over Christmas are not expected to be very bumper. In other words we are in the midst of an important economic slowdown caused by a poor holiday season. The sudden rise in All Inclusive Packages has robbed bars and restaurants of thousands of clients. A similar state of affairs has happened with shops, also. Now, these are dangerous times and it is best to be optimistic. The local government is confidently forecasting that the economy will grow by around 2.5 percent next year. But this is 2005 and as we know anything can happen in tourism. The millions of euros which are being ploughed into the local economy by the Balearic government as part of their ambitious building programme will help, but as I have said before in this space the Balearic tourist industry has some major problems and it is no good just trying to paper over the cracks and say that all is well when it isn't. I sincerely hope that in the coming New Year the Balearic government starts to address these problems because otherwise our levels of economic growth will remain low.